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Crime Solicitors

Directors disqualified for mis-selling carbon credits as investments (10 December 2015)

Date: 10/12/2015
Duncan Lewis, Crime Solicitors, Directors disqualified for mis-selling carbon credits as investments

The directors of two London-based companies have been disqualified, after an investigation by the Insolvency Service found that Voluntary Emission Reductions (VERs) certificates – a type of carbon credit certificate –
were mis-sold to members of the public as an investment.


The investigation was launched with the winding up of the companies and in the public interest, following investigations by Company Investigations into the affairs of both investment companies.

Investigators discovered that Philip David Claremont Morris and William Edward Strutt – directors of Capital Acquisitions Ltd (CAL) and City Asset Partnership Limited (CAP) – sold VERS to their clients for a total of £1.9 million, on the basis that VERs would increase in value and could then be sold for a profit.

However, CAL and CAP charged a mark-up of between £2.20 and £5.50 for VERs it purchased, thereby hindering VERs being sold as a viable investment from the outset.

The Official Receiver and the market’s own self-regulating authorities – HM Revenue & Customs and the Financial Conduct Authority – were also unable to identify a viable secondary market for VERs, providing further evidence that VERs were not a suitable investment for CAL and CAP customers.

Investigators found this information was available to Mr Strutt and Mr Morris prior to the first-known sale of VERs to members of the public as an investment.

The absence of a viable market into which to sell VERs meant that members of the public who had purchased them from CAL and CAP would be unable to realise their “investment” – and would suffer financial loss as a result.

As a result, Mr Morris gave an undertaking to the Secretary of State for Business, Innovation & Skills to be disqualified as a director for a period of 14 years – and Mr Strutt has been disqualified as a director by the High Court for a period of 13 years.

Mr Morris’ disqualification from 7 July 2015 and Mr Strutt’s disqualification from 19 November 2015 means that they cannot promote, manage, or be directors of a limited company until 2029 and 2028, respectively.

Both received bans for selling VERs as an investment to members of the public.

Official Receiver in the Public Interest Unit, Paul Titherington, said:

“The directors displayed a lack of commercial probity while selling carbon credits to hardworking members of the public.

“Those individuals are now left in a position where they cannot sell their carbon credits for profit, or at all.

“The Insolvency Service will investigate those directors who sell dodgy investments.”

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